• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Balancing debt and savings

As of the third quarter of 2024, the average consumer had $6,380 in credit card debt, per TransUnion. Meanwhile, the average unsecured personal loan balance per borrower was $11,652.

If you’re juggling debt, it’s important to try to pay it off as quickly as possible, since the longer you carry it, the more you’ll be forced to spend on interest. But it’s also important to shield yourself from further debt, which makes starting an emergency fund a priority. Having a cushion can protect you from borrowing more money if you need it suddenly, such as following an unplanned expense or job loss.

Once you’ve set up a modest emergency fund (be sure to continue making at least minimum debt payments), your focus should be on slashing your debt. There are different methods you can use, such as the snowball method, where you tackle your smallest debts first, and the avalanche method, where you prioritize your expensive debts by interest rate and then move on to debts that are costing you less.

That said, it’s not a bad idea to invest a small amount of money for retirement each month while you’re in the process of paying your debt down. And if you have access to a 401(k) plan through your job with an employer match, aim to contribute as much as you can to take advantage of that matching.

Scammers are smarter than ever—are you protected?

The average American gets 2 scam calls and 3 scam texts every week. Think you can spot them? AI is making scams harder to detect, and in 2023 alone, Americans lost $12.5B to cybercrime. Don’t be next—learn how to protect yourself now!

Learn more

Preparing for a recession

As part of his election campaign, President Trump pledged to expand tax cuts, impose tariffs on imported goods to spur U.S. production and loosen regulations in key sectors like manufacturing.

If you’re concerned things will get worse before they get better, it never hurts to be recession-ready. A big reason consumers tend to fear recessions is that they can go hand in hand with layoffs. However, if you have an emergency fund to cover your expenses for a period of time, hopefully a few months without a job won’t land you in debt. And if you’re able to shed your debt (or at least some of it) ahead of a recession, you’ll have less to contend with if your paycheck does disappear.

It’s also a good idea to set yourself up with a backup income stream in case you find yourself out of a job. To that end, you can turn to the gig economy. Getting a side gig could not only give you peace of mind, but provide you some extra cash you can use to work toward financial goals like shedding debt, creating an emergency fund and building a nest egg for retirement.

Sponsored

This 2 minute move could knock $500/year off your car insurance in 2025

OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.

You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.

Maurie Backman Freelance Writer

Maurie Backman is a freelance contributor to Moneywise, who has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.

†Terms and Conditions apply.